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Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the use of a special machine that

  1. Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the use of a special machine that has total operating capacity of 170,250 hours per year. Information on each of the three products is as follows:

    Basic Standard Deluxe
    Selling price $11.70 $16.58 $34.18
    Unit variable cost $6.46 $10.76 $14.14
    Machine hours required 0.10 0.20 0.50

    The marketing manager has determined that the company can sell all that it can produce of each of the three products.

    Required:

    1. How many of each product should be sold to maximize the total contribution margin? If a product should not be produced at all, enter "0" for your answer.

    Number of basic units:
    Number of standard units:
    Number of deluxe units:

    What is the contribution margin per machine hour for each of these products? If required, round your answers to the nearest cent.

    Basic units: $ per machine hour
    Standard units: $ per machine hour
    Deluxe units: $ per machine hour

    What is the total contribution margin for this product mix?

    $

    2. Suppose that Behar can sell no more than 281,000 units of each type at the prices indicated. What product mix would you recommend?

    Number of basic units:
    Number of standard units:
    Number of deluxe units:

    What would be the total contribution margin?

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